Council to blame for failure of Tift Haus deal

Guest Columnist

After four months and more than $6,000 in preliminary costs to the buyers, I am profoundly saddened to report that the current sale of the Tift Haus has failed as a direct result of the decision made by the North Bend City Council members presiding over the issue at the June 29 public hearing. In my opinion, the decision not to vacate the entire 40 feet of right of way is one of the greatest missed opportunities the city has had to continue downtown revitalization. The consequences of their decision may impact downtown investment long into the future. I will try to explain.

Anyone who knows me understands that I place great importance on rebuilding our downtown. It was a No. 1 priority during my election campaign last year and I carry that commitment through to my career as a real estate broker. I could buy, sell and lease real estate anywhere, but I choose to do it here in the place that I care about and call home. That’s why when I saw the Tift Haus was listed for sale, I brought it to the attention of Jim and Frankie Westlake and Councilman Chris Garcia, owners of the very successful Frankie’s Pizza. Jim had asked me to be on the lookout for a restaurant opportunity and the Tift Haus was a perfect match for their desire to build a fantastic restaurant.

Their concept was simple. Acquire the Tift Haus, purchase the vacant lot next door, completely renovate and breathe new life into the restaurant and expand when the water moratorium is lifted. There was even discussion of purchasing the lot adjacent to the river and developing it for small concerts, wedding receptions, catered events and a river walk. A whole “gateway village concept” was being formulated. Over $1 million would have been invested in the restaurant and the entire concept could have made the western gateway to our city a multimillion dollar project.

Councilmembers made arguments during the hearing in opposition to the administration’s recommendation of a full 40-foot vacation. I would like to address some of those arguments that led up to the decision that resulted in the sale failing.

First and foremost was the idea that all they had to do was vacate a small area under the building itself and the owners could retire and the sale could proceed. Nothing could be further from the truth. Real estate includes not only the structure, but also the property. In this case, the buyers required that the property include the front parking and monument sign that had been exclusively utilized by the Tift Haus for more than 40 years. There is a total of 36 feet of encroachment. The owners asked for 40 feet for the logical reason of giving the city a contiguous or straight property line with Tesoro to build sidewalks. The property in the current condition gives the buyers no rights concerning their signage and parking. That is a huge risk factor when you are talking about investing $1 million into a project.

The argument that the Tift Haus parking lot should not be vacated because it has some future “gateway” benefit for the public dumbfounds me. The city would have retained 60 feet of right of way – 21 more feet than on the other side of the same road. Go to the Tift Haus and see for yourself. The new property line would be about five feet in front of the monument sign. The only property that could be considered a “gateway” might be the first property adjacent to the river. The Tift Haus is the third lot in and the city could never deny ingress and egress to the Tift Haus for any purpose. The 4,000 square feet to be vacated is completely useless except as parking for the Tift Haus.

Contrary to the opinion of our city attorney, an argument was made that vacating this particular right of way would set a precedent or “slippery slope” for vacating other properties in the future. Vacating city property is done on a case-by-case basis. The process for doing so is very clear in state statute. The vacation or sale of unneeded property is not something to dread, but an opportunity to get more property on the tax rolls and decrease maintenance costs and liability of owning property of little use for the public benefit.

Finally, Councilman Garcia and I were accused of asking the city for a “financial windfall” and aiding the buyers and sellers in what was implied as some kind of land grab. This was property the city didn’t even know it owned. It was always believed to be under the ownership of the Tift Haus. The terms of the purchase-and-sale agreement were already agreed to in what was supposed to be a normal real estate transaction and neither Councilman Garcia nor I would gain more financially if the vacation were granted. We did the correct thing by recusing ourselves from the hearing because Councilman Garcia was one of the buyers and I would receive a commission if the sale proceeded to closing. This is the normal process for the appearance of fairness in situations like this. The sellers were prepared to pay full price of the appraised value, which had to be independently appraised for a minimum fee of approximately $5,000. The requested vacation was a cost of closing to the sellers, not a windfall. The windfall was the city’s to have.

The City Council could have sold the requested right of way and solved a 40-year situation of a non-contiguous property line. They could have done so with the requirement that the sellers first construct a sidewalk, planting strip and lamp posts. The proceeds of the sale could have been allocated to continue the sidewalk in front of Tesoro or for other street or pedestrian improvements. Four-thousand square feet of parking lot would then have been placed on the property tax rolls to generate income for the city for the first time in history. When the buyers purchased the next lot, they would have likely asked for a vacation of that right of way also. Again, more unneeded land on the tax rolls with sidewalks constructed with private funds rather than your tax dollars. Of course, the city would have received a much needed boost in sales and B&O taxes after the renovation and expansion of the Tift Haus.

Downtown revitalization does not happen overnight. It occurs one building, one property at a time with the encouragement and cooperation of local government. It’s done through the investment and hard work of entrepreneurs like Westlake and Garcia. One successful project leads to the investment in another and slowly entrepreneurial interest returns to make downtown vibrant again. The failed Tift Haus sale reinforces what some investors believe is North Bend’s reputation for being a bad place to do business. Will the Tift Haus find another buyer? Probably. There are no guarantees, however, that the next buyer will be willing to make a similar investment. I believe this transaction would have truly benefited all of North Bend, not just the buyers and sellers. Local government can and must do better.

David Cook is a North Bend City Council member.